“Unprecedented Crisis Could Push Up to 60 Million into Extreme Poverty,” said David Malpass, World Bank Group President.
On May 19, 2020, the World Bank (WB), the Washington-based international body, said that around 60 million people may enter into extreme poverty due to the COVID-19 pandemic. As of May 20, 2020, at 2:00 PM IST, the outbreak has led to around 3,23,413 deaths and infected 49,01,773 according to John Hopkins University.
On announcing this figures to the general public, the President of the World Bank Group, David Malpass, informed the international community that the progress made in the last three years in the poverty alleviation will be erased by the COVID-19 crisis.
In its statement, the WB said that “Our estimate is that up to 60 million people will be pushed into extreme poverty – that erases all the progress made in poverty alleviation in the past three years.”
The WB forecasts that the global economy may enter a deep recession this year, as much as minus 5%. The international body is more concerned about this impact as it may cause great damage to the low-income countries where socio-economic disparities are very high. To this, the WB has proposed to help the developing countries by providing them with the rapid and flexible responses, through rapid cash and other expandable support on debt, to maintain the private sector, and to bolster the economic recovery in these regions.
To tackle this humanitarian crisis that originated because of the COVID-19 crisis, the WB has already announced the Financing Emergency Programs in 100 developing countries that are home to 70% of the world’s population. The cost for these programs are calculated at $160 billion and says that it would spend it over a period of 15-months as fast track facility. In allocating this much of funding to these countries, it says that the main aim of the programs is to effectively respond to the health, economic, and social shock that are caused by COVID-19.
In allocating this much of budget to the programs and to maintain private investment in these countries, the WB states that “There are the billions of dollars that were fast-tracked by the International Finance Corporation (IFC) and the Multilateral Investment Guarantee Agency (MIGA), the members of the World Bank, to help maintain the private sector.”
It says that these programs would mitigate corruption and create transparency to build resilience and recovery after the crisis. They also emphasised that the resources provided are of sizeable amounts and need much more to recover those developing countries from the clutches of COVID-19 damages. So, argued the bilateral donors, advanced countries and others to start their economies and to invest in these countries to generate incomes by way of remittances, trade finance and tourism.
The President of the WB Group has also spoken about the financial help to the world’s poorest countries, by way of suspending the repayment of official bilateral credit amount that was agreed on May 1, 2020, by the WBG, IMF and other G20 economies. By way of suspending the repayment of bilateral credit amount, the powerful nations reduced the present financial hurdles of the poorer countries to safeguard the lives and livelihoods of millions of people.
They also highlighted the need for China’s investment in the poorest countries for the collective goal to tackle the COVID-19 disaster and welcomed the Chinese President Xi Jinping’s commitment speech on the investment that was delivered on May 18, 2020, at the World Health Assembly (WHA).
In conclusion, the WB Group has called on the International Development Association (IDA) countries to act quickly on the advantages of the programs designed and to have full transparency on their debt and investment activities by their respective governments.
Note: This article is based on the World Bank Group’s statement that is retrieved from its official web page. You may read it here.